U.S. New Home Sales Decline Sharply in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Sales fall to six-month low.
- Declines are logged throughout the country.
- Median sales price eases.
New single-family home sales weakened 11.3% (-16.5% y/y) to 619,000 (SAAR) in May from 698,000 in April, revised from 634,000, according to the U.S. Census Bureau. Sales were 16.5% below the recent high of 741,000 in May of 2023. The Action Economics Forecast Survey expected sales of 645,000 new homes. Sales remained 40.0% below their peak of 1.031 million in October 2020 and were at the lowest level since November of last year.
New home sales declined throughout the country last month. In the Northeast, sales fell 43.8% in May to 18,000, the fourth consecutive monthly decline which left them down 43.9% y/y. Sales in the West declined 4.5% (-20.9% y/y) to 148,000 after falling 6.6% in April. In the South sales weakened 12.0% (-17.7% y/y) to 368,000 after rising 5.8% in April. New home sales in the Midwest declined 8.6% (+13.3% y/y) to 85,000 after rising 12.0% in April.
The median sales price of a new home eased 0.1% (-0.9% y/y) to $417,400 (NSA) in May following a 4.3% April decrease. The median sales price remained 9.3% below its October 2022 peak of $460,300. The average sales price of a new home improved 3.2% (4.9% y/y) to $520,000 in May. These sales price data are not seasonally adjusted.
The number of unsold new homes on the market rose 1.5% (12.9% y/y) to 481,000 in May, the fifth consecutive monthly rise. It was the highest level since January 2008. The latest figure was well above a low of 282,000 in October 2020. The seasonally adjusted months' supply of new homes for sale rose to 9.3 months in May, down from a high of 10.6 months in July 2022.
The median number of months a new home stayed on the market edged up to 2.3 months in May from 2.2 months in April. The reading remained up from the record low of 1.5 months in both September and October of 2022 but down from a high of 5.1 months in March 2021. These figures date back to January 1975.
New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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